Survey: More and more small businesses are considering lending online

With economic uncertainty being their biggest challenge, more than half of small businesses would consider taking out a loan online if they need capital this year, according to a new survey from JPMorgan Chase.

But despite the economic challenges created by the pandemic, most small and medium-sized businesses have expressed optimism about their performance for the coming year, according to the JPMorgan Chase Business Leaders Outlook annual report released this week. The survey found that 77% of midsize businesses and 63% of small businesses remain optimistic about their own performance in 2021.

The survey included responses from 2,100 business leaders from various US companies. It was conducted online from November 11 to 24 for small businesses with annual sales between $ 100,000 and $ 20 million and from November 13 to December 1 for mid-market companies with sales of Annual business is between $ 20 million and $ 500 million.

While most businesses have a bullish outlook, fewer small businesses are forecasting revenue and sales growth this year, down to 47% from 60% last year. Mid-sized companies had a better outlook, with 69% expecting revenue and sales growth in 2021, similar to their outlook last year before the pandemic began.

“Companies have weathered many storms over the past year, displaying impressive levels of creativity and adaptability as they transitioned to new operating models, distribution channels and technologies,” said Jim Glassman , chief economist at JPMorgan Chase Commercial Banking, in a statement. “The challenges are not over, but their tenacity has helped maintain economic momentum and offers optimism for the recovery in 2021.”

Online lending is an option that small businesses considered during the pandemic to access capital. Last year, 44% of small businesses explored lending online, and 25% took out a loan online. For the coming year, 56% said they would be open to getting a loan online if they needed capital.

Other actions companies have taken to respond to the economic environment created by the pandemic include:

  • Constitution of cash buffers: Almost two-thirds (65%) of midsize businesses and one-third (31%) of small businesses have increased their cash reserves to cushion potential future disruptions, with 33% of small businesses expecting to save more in 2021.
  • Digitization of payments: More than half (56%) of mid-sized businesses have increased their use of online banking and treasury tools, including electronic payments. Small businesses have turned to contactless payment options, with 23% already implementing them and 20% planning to do so in 2021. More than one in 10 (14%) small businesses have changed their business model so that 100% of sales come from e-commerce in 2020, with 12% planning to do so in the coming year.
  • Switch to remote work: The majority of mid-sized (84%) and small (72%) businesses have shifted some or all of their workforce to remote work in the past year.

“Businesses were forced to make new, unexpected pivots over the past year, including accelerating their adoption of new processes, technologies and contingency plans,” said John Simmons, head of mid-market and specialty industries banking. at JPMorgan Chase. “The companies best positioned to succeed in 2021 will be those that focus on staying nimble in the midst of continued volatility and changing consumer demands. “

For 61% of midsize businesses and 47% of small businesses, the economic uncertainty created by COVID-19 is the main challenge they face. Generating sales and revenue growth remains a major challenge for midsize and small businesses, with 42% of mid-size executives and 34% of small businesses citing it as a concern.

Other survey findings included a modest drop in employment projections, as only 45 percent of mid-size businesses and 34 percent of small businesses plan to increase their full-time staff over the next year. . Another hiring challenge is the limited supply of qualified candidates.

In addition to operational changes, 47% of small business leaders say their core business values ​​have changed since the start of the pandemic, including placing greater value on their community, employee relations, and digital solutions for their businesses. companies.

“Like many of us, the events of the past year have shaped the perspective of many small business owners on what is most important to them,” said Jennifer Roberts, CEO of Business Banking. “Business leaders value more quality time with family and friends, and the importance of good health for themselves, their employees and their community. These are likely to be permanent state of mind changes. “


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David A. Albanese

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